US grants Chevron license to pump oil in Venezuela

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The Biden administration said on Saturday it would lift a key oil sanction on Venezuela, marking the first major crack in a years-long U.S. embargo that could eventually help loosen the global energy market.

Chevron, the only US oil company still active in Venezuela, is part of a joint venture with the country’s national oil company, but has been prevented by sanctions from operating there. Under a new license from the Treasury Department, he will be able to resume pumping oil. The limited license states that any oil produced can only be exported to the United States. None of the proceeds from its sale can go to the Venezuelan state corporation, but must be used to repay Venezuelan creditors in the United States.

The move comes as Nicolás Maduro’s government held its first formal talks with Venezuela’s opposition coalition in over a year. At a meeting in Mexico City on Saturday, the two sides agreed to ask the United Nations to manage several billion dollars in public funds held in foreign banks that will be released to help ease a humanitarian crisis in Venezuela.

Negotiators also agreed to continue talks next month to discuss a timetable for “free” elections in 2024 and human rights issues.

“We have long made it clear that we believe the best solution in Venezuela is a negotiated solution among Venezuelans,” said a senior Biden administration official who spoke on condition of anonymity in accordance with rules established by the White House. “To encourage this, we have also stated that we are willing to provide targeted sanctions relief.”

The policy “remains open to further calibration of sanctions,” the official said. “But any further action will require further concrete steps,” including the release of political prisoners and recognition of the legitimacy of the opposition, as well as unhindered access for UN humanitarian missions.

The official dismissed reports that the administration was acting to alleviate an oil shortage and high energy prices exacerbated by Russia’s invasion of Ukraine. “Allowing Chevron to start extracting oil from Venezuela will have no impact on international oil prices. This is really about Venezuela and the Venezuelan process,” the official said, where the United States “supports a peaceful and negotiated outcome to the political, humanitarian and economic crisis.”

Venezuela has the largest oil reserves in the world, slightly more than Saudi Arabia, although its thick crude is more difficult to extract. But its output faltered due to government mismanagement even before Maduro took over in 2013 following the death of Hugo Chávez, a former military officer elected in 1998.

US sanctions against Venezuela that began 15 years ago for drug trafficking, corruption and human rights abuses have gradually widened, culminating in the administration of Donald Trump. Trump has sharply tightened measures against the state oil company, Petróleos de Venezuela, SA or PDVSA; the central bank; and individuals and businesses. The activities of American oil companies were almost completely prohibited there.

The sanctions were an attempt to block global revenues from oil sales, and production fell sharply as black market exports were sold mainly to China and India. When the Venezuelan opposition declared the December 2018 elections illegitimate, it recognized Juan Guaidó, the leader of the opposition in parliament, as interim president. The United States quickly followed suit, recruiting dozens of other Latin American countries to do the same.

But economic and political pressure on Maduro had little effect, and the Venezuelan people bore the brunt of a failing economy and repression, leading millions to flee to neighboring countries as well as the United States. United, where the number of Venezuelan refugees has swelled.

President Biden came to power convinced that Trump’s Venezuela policy had failed, but he took some steps to reverse it, as powerful lawmakers vowed to block action and the administration held out hope of winning the elections. midterm votes of anti-Maduro Venezuelans and other Latin Americans in Florida. As recently as the summer, Biden called on Guaidó to assure him of continued American recognition and support, even as other governments and members of Guaido’s own opposition coalition turned their backs on him and called for negotiations with Maduro.

The Republican election rout in Florida seemed to convince the administration that it was time to move on. Chevron officials said it would take some time to get their operations back up and running in Venezuela.

The sanctions change appears to be a nimble sidestepping of a main complaint from US critics – the possibility that the Maduro government will directly benefit. Under the terms of the license, PDVSA is cut off from any profit its joint venture may make with Chevron.

But Maduro would not be worse off than he is now, and one crack in the sanctions may lead to more. For the administration, assuming negotiations with the opposition continue toward democratic elections and human rights improvements, any loosening of global energy supplies is seen as a positive.

In a statement Saturday on the resumption of talks in Mexico, Sen. Robert Menendez (DN.J.), chairman of the Senate Foreign Relations Committee and a longtime supporter of Venezuela, said that “if Maduro tries again to To use these negotiations to buy time to further consolidate his criminal dictatorship, the United States and our international partners must roll back the full force of our sanctions that brought his regime to the negotiating table in the first place.

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